Raising Medicare Age Could Cost Employers $4.5 Billion

Employers who offer retiree health care plans would see their costs increase $4.5 billion if the eligibility age for Medicare were increased in 2014 to 67 from the current 65, according to an analysis released March 29 by the Henry J. Kaiser Family Foundation.

Researchers at the Menlo, California-based foundation projected the cost increase would occur because employer plans would become the primary payer of health care bills for retirees from age 65 to 67 rather than a secondary payer, as is now the case.

Last year, costs in employer-sponsored health care plans available to Medicare-eligible retirees averaged $4,654 per retiree compared with an average of $10,872 for pre-Medicare eligible retirees, according to a Mercer survey.

While the idea of raising the age to be eligible for Medicare has been discussed but never adopted by federal lawmakers, “amid current policy discussions about the Medicare program and reining in federal spending, the idea could gain new traction,” according to the Kaiser report.

The Kaiser report, Raising the Age of Medicare Eligibility, is available at kff.org/medicare/upload/8169.pdf.